N54bn pension arrears will boost economic activities – Experts

Some experts have commended the Federal Government for releasing N54 billion pension arrears, saying it would boost demand for goods and services in the county.

They told the News Agency of Nigeria (NAN) in interviews on Friday in Lagos that the funds would stimulate economic activities.

NAN reports that the National Pension Commission (PenCom) is expected to disburse the fund to Pension Fund Administrators (PFAs) for onward payment to retirees.

Mallam Garba Kurfi, the Managing Director, APT Securities and Funds Ltd., a PFA operator, said the release of the funds would boost economic activities through various investments.

Kurfi, who commended the Federal Government for settling the arrears, saying that part of the funds would find their ways into the bond market, equities market and money market instruments.

“The development is a good thing because we have many outstanding funds with PenCom; the release of the funds will go a long way in revitalising the economy,’’ he said.

Kurfi said that PFAs, in line with their mandate to divert part of the money to investable incomes, would invest some of it in the market.

He called on the government to avoid delays in paying pensioners, noting that some of the beneficiaries could have died before the release of the funds.

“Pensioners should be paid as and when due for individuals to benefit from it and at the same time to kick-start economic activities”.

Dr Uche Uwaleke, Head of Banking and Finance Department, Nasarawa State University, said that the issue of pension arrears had always been a knotty one for the Federal Government.

Uwaleke told NAN that state governments were equally facing the same challenge which, in most cases, were due to under-appropriation or shortfalls in projected revenue.

He said that governments’ inability to settle salaries and pension obligations contributed significantly to the current economic recession.

“If fund for the pension arrears is released now, it will go a long way in boosting demand for goods and services as well as stimulating the economy, thereby hastening the recovery process,’’ Uwaleke said.

He said that adequate provisions should be made in the annual budget to avoid arrears, especially now that the contributory pension scheme is in place.

“Government at all levels, when rationing available revenue, should accord priority to the payment of workers’ salaries and pensions of retirees.”

Reports have it that the Federal Government, on April 6, said it had cleared inherited arrears of accrued pension benefits for 2014, 2015 and 2016 by releasing N41.5 billion and N12.5 billion for January, February and March this year.

Mrs Kemi Adeosun, the Minister of Finance, confirmed the release of the money in a statement signed by the Director of Information in the ministry, Salisu Dambatta.

She said the government was concerned about the plight of pensioners who retired under the Contributory Pension Scheme without being paid.

“Despite conflicting demands for available cash, President Muhammadu Buhari has always expressed concern about the plight of workers and pensioners.

“Consistent with this, we have released N41.5 billion, which clears the arrears inherited from the previous administration from 2013 to 2015 and underpayments in 2016.

“This will bring relief to thousands of our elders who have served and deserve to be paid their entitlements promptly and fully.

“The amount we paid includes arrears and the impact is that those who retired as far back as 2013, who had been unable to access pension under the contributory scheme due to non-payment, will now be paid.”

The minister said that henceforth, the monthly allocation to PenCom, based on the 2017 appropriation, would be paid regularly along with the monthly salaries of ministries, departments and agencies of the Federal Government.